Wednesday, September 15, 2010

1099 a' go-go

Nancy Pelosi's desire that we pass ObamaCare in order to find out what's in it is the gift that keeps on giving.

Back in April, the Cato Institute alerted us to just one of the thousands of provision buried within ObamaCare and which would require businesses to submit to the I.R.S. individual 1099s for every entity with which they did $600 of business for that year. Here's Cato's Chris Edward's laying it out in real-world terms:

For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

Well, it now appears that 6 months after passage of the bill, members of Congress or at least those who have finally got around to reading the legislation they have passed are realizing what this means to small businesses around the country.

The Senate will vote on amendments to the White House small business bill that would rescind an ObamaCare mandate that companies track and submit to the IRS all business-to-business transactions over $600 annually. Democrats tucked the 1099 reporting footnote into the bill to raise an estimated $17.1 billion, part of the effort to claim that ObamaCare reduces the deficit by $100 billion or so.

Meanwhile, small businesses are staring in horror toward 2013, when the 1099 mandate will hit more than 30 million of them. Currently businesses only have to tell the IRS the value of services they purchase from vendors and the like. Under the new rules, they'll have to report the value of goods and merchandise they purchase as well, adding vast accounting and paperwork costs.

Most Democrats now claim they were blindsided and didn't understand the implications of the 1099 provision—which is typical of the slapdash, destructive way the bill was written and passed. As the critics claimed, most Members had no idea what they were voting on. Some 239 House Democrats voted to dump the 1099 provision in August, and the repeal would have passed except Speaker Pelosi rigged the vote procedurally so it needed a two-thirds majority. She thus gave Democrats the cover of a repeal vote without actually repealing it.

(italics, ours)

Yeah, no kidding.

For its part, the White House is not onboard with this proposal but rather a compromise where the threshold is raised to $5,000. This just exempts more businesses from a simply horrible idea. And besides, it's a tactically tone-deaf stance by a tone-deaf administration: show everybody that you are willing to work with the Republicans on what is clearly an unpopular provision of ObamaCare. See, were working with the Republicans just like everybody wanted us to.

It's not as if there are not still thousands of other horrible provisions left in ObamaCare that they will be able to inflict upon the public. It's not as if they are going to run out of them after a compromise or two.


SarahB said...

At least it gets me in the mood for Halloween. Sharing.

Anonymous said...

this section was pointed out well before the vote. anyone who could not see that this provision was a gigantic clusterf$%k is lying straight to your face. or has no experience in the business community. whichever. or both.

imagine that. the government wanting detailed notes on every transaction over 600 dollars. that sentance alone should send screams through congress.

but yet here we are.

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